Chace Family of Rhode Island Seen as Long-Term Shareholders of Berkshire Hathaway's Textile Roots
The Chace family may be the longest-standing shareholders of Berkshire.
The Chace family of Rhode Island is regarded as shareholders of Berkshire Hathaway's textile origins. Ancestor Oliver Chace founded the Berkshire textile mill in Swansea in 1806; after the merger of Berkshire Fine Spinning and Hathaway in the mid-20th century, Malcolm G. Chace Jr. became chairman of the merged company, with Seabury Stanton as president. Buffett began purchasing shares for his partnership fund at about $7.50 in 1962, gaining control of the New Bedford board on May 10, 1965, with an average cost of about $14.86, totaling around $14 million.
At the time of the transfer of control, the family did not cash out all at once. Stanton broke with Buffett and resigned due to the offer price being 1/8 dollar lower than verbally agreed; Malcolm Chace Jr. remained as chairman, while Ken Chace, designated by Buffett, became president and was given loans to buy company stock, aligning management with shareholders. Buffett later stated that Kim Chace and his father had been tied to Berkshire for over forty years and were "extremely supportive." Forbes reported that some family shares cost as low as 25 cents, later rising to tens of thousands of dollars per share in A-shares. In 1998, Kim held about 13,000 shares, with an estimated wealth of $910 million; in 2006, public figures showed he held 1,243 Class A shares, worth about $110 million, while Buffett held approximately 475,000 shares, about 38%. Some family members sold early, while others retained board positions, leading to a wealth gap.
The textile business did not yield returns during this holding period. Nine years after the merger, sales totaled $530 million, with a total loss of $10 million; Buffett closed the last factory in 1985, stating that buying Berkshire was one of his biggest mistakes. Cash was diverted to buy insurance and other businesses, leaving the shell intact while the spindles disappeared. Ken Chace managed the factory but was not allowed to manage capital allocation. The source of family wealth shifted from cotton fabric to the compounding of the same stock in Coca-Cola and insurance companies.
The "longest-held" status established the legal continuity of the company: they were shareholders before Buffett entered, and some branches continued to hold after he arrived. Buffett's partnership fund only appeared on the shareholder list in 1962, a shorter duration than the textile family. This does not equate to a unified "Chace account" that can be read in today's 13F filings—shares have been split into trusts and cousins, and Rhode Island has even had court disputes over a $70 million trust.
The A-shares closed at about $756,000 per share in August 2026, with a company market value of about $1.08 trillion. Those who survived factory closures, changed chairmen, and split shares hold the same ticket that has never reset its cost.
In market mechanics, the sellers in 1965 were war-weary New England textile shareholders, while the buyers were Omaha funds looking to turn net working capital into a controlling tool. The transaction was ignited by an offer that was 1/8 dollar off, not by textile prosperity. Subsequently, funds flowed from factory depreciation to floating cash investments. Beneficiaries were the Chace branches that chose not to sell and Buffett himself; the pressured parties were managers who treated the factory as a business and those who viewed Berkshire merely as a textile mill.
Source: Public Information
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The Chace family proves one thing: the compounding of Berkshire does not belong to those who invented it, but to those who did not cash out in 1965. Malcolm gave up the chairman position, and Ken managed a factory with no future, resulting in a ticket that later no longer paid dividends, relying solely on intrinsic value to grow. Buffett despised Stanton's 1/8 dollar, yet kept Chace because the family provided legitimacy, and the factory provided cash that could be drawn.
The capital path is very simple. Cotton spinning profits dried up, buybacks reduced capital, stock prices fell below working capital, and the partnership fund bought in; after gaining control, they stopped returning cash to textiles and shifted to buying insurance companies. If the family had demanded cash during the merger, they would have become ordinary New England heirs; by wanting stock, they were forced to participate in the subsequent sixty years of capital reallocation. The $900 million reported by Forbes is a result of holding, not of textiles. The trust litigation indicates that compounding will again become a dispute over distribution rights at the grandchild level.
In comparison to Vanderbilt selling railroads and the Ford family preserving voting rights, Chace is closer to the latter's most passive branch: lacking operational control but having an extremely long holding period. The industry phase has long since transitioned from textiles, and the family's position is that of a fossil shareholder—proving that the company's transformation from a textile mill to an insurance holding company is continuous, not newly established.
The structural change is a transfer of pricing power. Pricing power has shifted from the cotton fabric market to Buffett's capital allocation authority. The mechanism is: poor enterprises are bought at a discount, and if the controller changes the direction of capital, the old shareholders' tickets can become parts of new machines. The longest holders win not by judgment but by not having exchanged their tickets for living expenses during the wrong decade.
ABAB News · Law of Cognition
The longest shareholders are often those who did not cash out during the turning years.
Factories can close, but tickets can remain unchanged.
Compounding punishes those who leave too early, even if they were right.